My husband remembers about 20 years ago a CEO being run out for spending to much in double track improvements. IIRC he said his name was Robert Krebs or something like that and was the head of the BNSF at the time. The BOD told him he was spending way to much money double tracking the ATSF transcon all over the system they said the traffic levels did not justify the spending. They kept telling him be more like EHH in fact cut back on capital spending. He refused and was fired. However 2 years after he was released the traffic he had been building for showed up and the BOD had egg on its face as all that so called excess capacity was gone and they needed more of it fast. I guess the Boards of these get it now companies need to realize is play the long game not what the Street wants. These days it is I want results now not in 5 years. So people that can see thru the fog and see what is needed in the future are cast aside for people that promise to get you ahead right now regardless if they crash the plane.
Being held accountable to Wall St can be a pain for CEO's who have the vision to look ahead and foresee changes in the economy. That's not saying the stockholders shouldn't have input. They, too, have an interest, but unless they are well informed regarding economic trends their opinions and demands may be wrong. Of course, so could the decisions of the CEO. Only time will tell who was right.
Not having to answer to anyone but Berkshire Hathaway gives the CEO of BNSF an advantage. He doesn't have to answer to anyone but the Buffett crew. As long as they are happy he's covered. The door can swing both ways.
Norm
oltmannd Norm48327 I have this gut feeling Harrison is going to fail at CSX. Don't ask me why, it's just there in my mind. After closing a few small humps, dead silence. I'll go with "Who knew operating CSX was so complicated?"
Norm48327 I have this gut feeling Harrison is going to fail at CSX. Don't ask me why, it's just there in my mind.
I have this gut feeling Harrison is going to fail at CSX. Don't ask me why, it's just there in my mind.
After closing a few small humps, dead silence.
I'll go with "Who knew operating CSX was so complicated?"
It hasn't been "dead silence". Lots of changes...
An "expensive model collector"
I'll take the "wait and see" attitude.
n012944 oltmannd Norm48327 I have this gut feeling Harrison is going to fail at CSX. Don't ask me why, it's just there in my mind. After closing a few small humps, dead silence. I'll go with "Who knew operating CSX was so complicated?" It hasn't been "dead silence". Lots of changes...
Such as???
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
To read posts here, Harrison is some crazed monster who has destroyed three railroads already and now will do the same at CSX.
C&NW, CA&E, MILW, CGW and IC fan
schlimm To read posts here, Harrison is some crazed monster who has destroyed three railroads already and now will do the same at CSX.
Well all I know is my boss is getting calls from customers that CSX serves already that deal in hazmat wanting to know what it will cost them to switch to us if they decide they can not stand the service level they get from CSX anymore gets worse. These are fortune 500 companies that have dealt with EHH from his time at CN and CP and several also when he was at the IC so they know the man his goals and what happens. They are already making their contingency plans.
Freight volumes are very strong now, any shipper would be wise to have a backup or five. I've got about five thousands loads I can't move right now.. may have to rail them as trucks are booked solid until about July. I'm guessing the railroads are being swamped with freight too.
Of course he's not "some crazed montser". He's a super bright railroader who championed scheduled railroading to maximize asset utilization and got to name it "Precision Scheduled Railroading". He deserves a TON of credit.
That was then. Everyone saw him do it and and copied wide swaths of his game plan.
This is now. CSX is already operating pretty efficiently and has come a LOOOONG way in the past decade or so. There's just not that much more to get.
Wonder why we don't see major terminal closing or a big change in the operating plan? It's because there really isn't a much better one - and improvements to a network as fragile and complex as CSX are difficult and risky.
oltmannd schlimm To read posts here, Harrison is some crazed monster who has destroyed three railroads already and now will do the same at CSX. Of course he's not "some crazed montser". He's a super bright railroader who championed scheduled railroading to maximize asset utilization and got to name it "Precision Scheduled Railroading". He deserves a TON of credit. That was then. Everyone saw him do it and and copied wide swaths of his game plan. This is now. CSX is already operating pretty efficiently and has come a LOOOONG way in the past decade or so. There's just not that much more to get. Wonder why we don't see major terminal closing or a big change in the operating plan? It's because there really isn't a much better one - and improvements to a network as fragile and complex as CSX are difficult and risky.
Which all goes to prove that EHH is not worth his asking price of CSX picking up his CP forefited bonus money. He may be worth a run of the mill railroad CEO's salary - UNTIL he proves he is worth more. As a stockholder I don't want to pay for what was done and forefited elsewhere, only for what you have done for ME.
Never too old to have a happy childhood!
oltmannd n012944 oltmannd Norm48327 I have this gut feeling Harrison is going to fail at CSX. Don't ask me why, it's just there in my mind. After closing a few small humps, dead silence. I'll go with "Who knew operating CSX was so complicated?" It hasn't been "dead silence". Lots of changes... Such as???
Additional locals, and road trains no longer doing line of road work. Changing blocking around to be more efficient. Changing of rules to speed up operations. Getting rid of remotes. Adding U men.
These are all things that have resulted in a better railroad (IMHO). They are also items that you won't read on the railfan boards. It just isn't sexy to the heritage unit/#opendoorpolicy railpictures.net crowd. It also isn't intersting to the people who want to hate EHH, and take closing of humps and running with it. They will say that a hump closing, even though they are still flat switching at the yards, is an example of his slash and burn policy. They will ignore that the car volume doesn't require a hump, and how much a hump yard costs to run.
I agree with taking a wait and see attitude, however as someone involved with the day to day operation, I am impressed so far.
How wide spread is the removal of remotes?
It's been fun. But it isn't much fun anymore. Signing off for now.
The opinions expressed here represent my own and not those of my employer, any other railroad, company, or person.t fun any
Harrison "crashed the plane at CP" and left a mess as a result of unhappy customers, many of whom have left where possible. I agree with your statements. CEO's need to be visionary and look at the big picxture. Cutting out marginal business can come back and bite you when the economy turns south and you could use the business to help keep the lights on.
Shadow the Cats owner My husband remembers about 20 years ago a CEO being run out for spending to much in double track improvements. IIRC he said his name was Robert Krebs or something like that and was the head of the BNSF at the time. The BOD told him he was spending way to much money double tracking the ATSF transcon all over the system they said the traffic levels did not justify the spending. They kept telling him be more like EHH in fact cut back on capital spending. He refused and was fired. However 2 years after he was released the traffic he had been building for showed up and the BOD had egg on its face as all that so called excess capacity was gone and they needed more of it fast. I guess the Boards of these get it now companies need to realize is play the long game not what the Street wants. These days it is I want results now not in 5 years. So people that can see thru the fog and see what is needed in the future are cast aside for people that promise to get you ahead right now regardless if they crash the plane.
zugmann How wide spread is the removal of remotes?
From what I hear, most of the major terminals will be back to full crews.
It will be interesting to see if he can make this a reality.
http://www.cnbc.com/2017/04/20/csx-surge-after-new-ceo-says-profits-will-increase-by-25-percent.html
Excerpt from Wall Street Journal, Apr. 20
CSX Corp. Chief Executive Hunter Harrison promised changes big and small at the railway, from idling excess locomotives to clearing bottlenecks at major interchanges, in his first public remarks since taking the top job last month.
Mr. Harrison said during a call with analysts Thursday that the precision-railroading strategy he implemented at his previous stints running Canada's two largest railroads could help trains run faster along CSX's complicated map in the eastern U.S., which include more interconnected routes and shorter hauls.
"It's a pretty drastic change, but a pretty simple model," Mr. Harrison said in an interview. "It's like a football team going from a running attack to a passing attack. It's still football, something you're familiar with, but a different strategy."
A 50-year industry veteran known as a turnaround expert, Mr. Harrison said plans are under way to idle about 550 locomotives and 25,000 railcars, and the railroad is considering additional closures. It has already converted four hump yards -- where train cars are sorted for their next stop -- to flat-switching yards, which Mr. Harrison has called more efficient to operate…
CSX's challenges include the "spaghetti bowl" of the Eastern rails, called that for the intertwined routes that CSX, Norfolk Southern Corp. and other short-haul freight lines and passenger trains use. Mr. Harrison said that CSX is working to bypass certain terminals that require extra processing.
"The way to handle that is to eat the spaghetti and get rid of it," he said.
Mr. Harrison also plans to devote attention to Chicago, a sluggish interchange where many rail networks meet, and he hinted at the potential for a partnership with another railroad network that could divert some of its traffic.
"Chicago is busting at the seams from a capacity standpoint," he said. "There's opportunities to, maybe, take business out of Chicago that will help the situation, lower our cost and improve our service."
wanswheel Excerpt from Wall Street Journal, Apr. 20 CSX Corp. Chief Executive Hunter Harrison promised changes big and small at the railway, from idling excess locomotives to clearing bottlenecks at major interchanges, in his first public remarks since taking the top job last month. Mr. Harrison said during a call with analysts Thursday that the precision-railroading strategy he implemented at his previous stints running Canada's two largest railroads could help trains run faster along CSX's complicated map in the eastern U.S., which include more interconnected routes and shorter hauls. "It's a pretty drastic change, but a pretty simple model," Mr. Harrison said in an interview. "It's like a football team going from a running attack to a passing attack. It's still football, something you're familiar with, but a different strategy." A 50-year industry veteran known as a turnaround expert, Mr. Harrison said plans are under way to idle about 550 locomotives and 25,000 railcars, and the railroad is considering additional closures. It has already converted four hump yards -- where train cars are sorted for their next stop -- to flat-switching yards, which Mr. Harrison has called more efficient to operate… CSX's challenges include the "spaghetti bowl" of the Eastern rails, called that for the intertwined routes that CSX, Norfolk Southern Corp. and other short-haul freight lines and passenger trains use. Mr. Harrison said that CSX is working to bypass certain terminals that require extra processing. "The way to handle that is to eat the spaghetti and get rid of it," he said. Mr. Harrison also plans to devote attention to Chicago, a sluggish interchange where many rail networks meet, and he hinted at the potential for a partnership with another railroad network that could divert some of its traffic. "Chicago is busting at the seams from a capacity standpoint," he said. "There's opportunities to, maybe, take business out of Chicago that will help the situation, lower our cost and improve our service."
Harrison may think he already has the bull by the horns but he's dealing with a railroad that is far diffferent in composition than IC, CN, or CP. No straight line railroading here; no point A to point B. Gather up the loaded cars and get them to their destination. It's not the "spaghetti bowl" you described but a spider web of lines in coal country that once produced tons of revenue for CSX and it's predecesors. Given "the war against coal" the lack of revenue from those lines is going to be a factor in the bottom line unless things change drastically. No way can he shed them without sacrificing the revenue they produce. They may be incidental in his opinion but they are still valuable. It's going to be fun to watch him try to sort things out and determine which lines to keep, lease, or sell
Let's face facts. Harrison is an investor's man. He's looking out for the stockholders, not the employees or customers. That's evidenced by his track record of alienating customers at CN and CP. Many of them went to CSX after he basically told them he didn't want their business. CN is presently eating CP's lunch north of 49. Cn has grabbed a lot of business Hunter thought irrelvant and unprofitable. CN is making profit from that. GM is still not happy with CN due to Harrison's antics and are still using other options including trucking to other railroads.
The demands of the hedge fund masters who are looking for quick profits and the expectation that CSX stockholders will pay Harrison the ransom he demands for leaving CP early are simply indications of an ego gone wild and out of control. Were I a stockholder in CSX I would vote to show him the door with no "participation trophy".
The preceding is personal opinion, but I can't help but think executive salaries are beyond obscene when the leave a corporation in shambles and are handsomely rewarded for doing that. It goes against my grain.
There was a time when CEO's had ethics. That day seems to have disappeared.
Off my rant.
The only thing Hunter and his hedge fund 'stockholders' want out of CSX is every last short term nickle and dime and then they will dump the wrecked and undercapitalized company quicker than the French TGV record run.
Non railroader here, so be patient.
I understand the difference between a flat yard and hump yard and have seen both in action. What extra costs are involved with running a hump yard? It seems that once the investment has been made, it would be efficient. What variable costs are involved?At what point is it more efficient to run a hump yard vs flat yard? 1000 cars per day? 1200 per day?
Roughly how many cars can be yarded per hour (or per day) by both methods? Yes, I know...yard configurations determine exact numbers, but what can be done with both?Ed
I cannot say anything bad about HUnter, He treated us craft guys well and made us proud to be railroaders.
My limited perspective.
Randy
Randy Stahl I cannot say anything bad about HUnter, He treated us craft guys well and made us proud to be railroaders. My limited perspective. Randy
I cannot say anything bad about HUnter, He treated us craft guys well and made us proud to be railroaders. My limited perspective.
Waiting with bated breath for details. Please tell us more.
Just a few notes....
Fluid conveyor belt like shipments by customers....couple problems here....
It is pretty rare anyone is switched 7 days a week by csx or any RR, M-F switches for higher volume customers are lucky. Many only see CSX switch 1 or 2 days a week. CSX by this very policy design chops off the begining and the end of the smoothness of the flow of shipments themselves.
Many business are cyclical for countless, real world market and economic reasons and as much as HH wants smooth flow of volume he cannot dictate against real world realities.
Precision scheduled RR. Not going to work on a system like csx as he would desire it. Our shipments are all over the place, out of control in the Southeast, keystone cops like situation. One factor is that there was little to almost no planning for the closure of the Atlanta hump, which given how fast it came after his arrival seems about right. The plan was basically close the hump....not a detailed study of the whole service plan and how to accomodate such a bold change, just do it. I have cars bouncing back and forth and never making their terminal and from insiders, this is a partial result of his precision scheduling. Operating managers are and have been getting fired on the spot for delaying a train off schedule, even for valid reasons or for things totally outside their control. Terminal managers are opting to not pull blocks of cars off trains or not add blocks of cars into trains in their terminal if it could make the train late and put them at risk of getting fired. So the work isn't getting done and trains run from origin terminal A and go to destination terminal B but much of the work in between assigned to the train's service plan isn't accomplished. Seems a bit odd to celebrate timeliness but the customers who pay the freight are not being served. As raw materal piplines get more sluggish, shippers tend to increase shipments to combat the transit problem, this increasses the volume somewhat on the csx system that in many places is already overwhelmed and makes it worse.
Let's tackle the things he said one at a time.
Bypassing terminals to cut 2-3 days off Chicago to FL transit times.
Does CSX really have 2-3 handlings to cut out? On NS, the typical merchandise trip moves about 500 miles and has 1.75 intermediate handlings (block swaps count as a handling). I would suspect CSX to be very similar. The network modeling tools are used to optimize the blocking plan to yield the minimum number of handlings on the network. The train service plan is then designed to move those blocks on the network as efficiently as possible.
If you try to optimize a lane at a time, you wind up with a sub-optimized network. If you're railroad is more-or-less linear, then there really isn't much difference. If it's more web, or even a triangle with a bunch of arms, you could wind up much worse off.
Merchandise train speed between terminals. Now 18 mph, wants 27-28.
Oh, boy. Selkirk to Chicago. No sweat. It's probably in the mid 20s now. On the old L&N? I don't think so. I wonder if he's basing it on the fact that CSX's intermodal speed between terminals is in the high 20s? If so, he HAS to know that speed overweighted by the sheer volume of intermodal trains between the northeast and Chicago, doesn't he?
Faster is better, especially if you can turn crews faster or double up on crew districts, but.... most of the time wasted isn't on the line of road, where trains are really doing the best they can to get up and down the grades, in and out of sidings and through the terminals. Power them up and don't let them get too long and you might squeeze a few mph more out of them - at quite a fuel penalty.
n012944 It will be interesting to see if he can make this a reality. http://www.cnbc.com/2017/04/20/csx-surge-after-new-ceo-says-profits-will-increase-by-25-percent.html
If coal keeps up, no problem. Lets see what NS says in a couple days
Nevermind... can't change the mind of people who love this guy...
Mechanical Department "No no that's fine shove that 20 pound set all around the yard... those shoes aren't hell and a half to change..."
The Missabe Road: Safety First
Peoples World In an ordinary year, CEOs like Kent and Broussard might be frontrunners for any CEO pay dishonors. But we do not live in ordinary times. This year, one grasping top exec has blown away the competition. Meet our Mr. Corporate Greed 2017: Hunter Harrison, the newly hired chief exec at the railroad powerhouse CSX. The 72-year-old Harrison didn’t come cheap. To take the reins at CSX, he demanded a four-year stock-and-cash pay package that his fans on the CSX board calculated would cost $230 million — and CSX officialdom initially pegged at an even grander $300 million. Some context: In Harrison’s last gig, running the Canadian Pacific railroad, he pulled down $89 million over the four-year span that ended in 2015. Harrison’s CEO predecessor at CSX made a mere $39.8 million over that same four-year stretch. Harrison still faces a possible obstacle on the way to his jaw-dropping jackpot. Shareholders will be taking an advisory vote on his pay plan at the CSX annual meeting later this spring. Harrison says he’ll quit if shareholders don’t give him a thumbs up. That thumbs up, industry observers feel, shouldn’t be much of a problem. Large investors like hedge fund mover and shaker Paul Hilal see Harrison as a railroad man with a magic touch. They credit him for “turning around” the lackluster operation at Canadian Pacific and see no reason why he won’t be able to generate an equally lucrative restart at CSX. How did Harrison achieve that “turnaround”? By mimicking the infamous “Chainsaw Al” Dunlap. At his previous CEO stop, Canadian Pacific, Harrison cut his workforce by 34 percent. Harrison, for his part, signaled he’ll take his basic Canadian Pacific game plan to CSX — and that prospect has the unions that represent 22,000 of CSX’s 27,000-employee workforce much more than slightly apprehensive. Harrison’s previous corporate “success” has come on the backs of cashiered workers. Business analysts see similarly stunning job losses in store for CSX. “We expect emphasis now to be placed on cost cutting,” notes Ben Hartford, a transportation expert at Robert W. Baird & Co. But the new CSX CEO doesn’t rate as a pure one-trick pony. Harrison does have other strategies for cutting costs besides killing jobs. He has a particular fondness for running longer trains. During Harrison’s tenure at Canadian Pacific, the number of cars in an average train bounced up by 25 percent. So the next time you find yourself twiddling your thumbs at a railroad crossing, waiting for an incredibly long CSX freight train to rumble by, keep in mind that your wait does serve a definite purpose. You’re helping to make Hunter Harrison the richest railroad executive since America’s original Robber Baron days. But also keep in mind that you’re only losing time. Thousands of other Americans are likely losing the best job they ever had.
In an ordinary year, CEOs like Kent and Broussard might be frontrunners for any CEO pay dishonors. But we do not live in ordinary times. This year, one grasping top exec has blown away the competition. Meet our Mr. Corporate Greed 2017: Hunter Harrison, the newly hired chief exec at the railroad powerhouse CSX.
The 72-year-old Harrison didn’t come cheap. To take the reins at CSX, he demanded a four-year stock-and-cash pay package that his fans on the CSX board calculated would cost $230 million — and CSX officialdom initially pegged at an even grander $300 million.
Some context: In Harrison’s last gig, running the Canadian Pacific railroad, he pulled down $89 million over the four-year span that ended in 2015. Harrison’s CEO predecessor at CSX made a mere $39.8 million over that same four-year stretch.
Harrison still faces a possible obstacle on the way to his jaw-dropping jackpot. Shareholders will be taking an advisory vote on his pay plan at the CSX annual meeting later this spring. Harrison says he’ll quit if shareholders don’t give him a thumbs up.
That thumbs up, industry observers feel, shouldn’t be much of a problem. Large investors like hedge fund mover and shaker Paul Hilal see Harrison as a railroad man with a magic touch. They credit him for “turning around” the lackluster operation at Canadian Pacific and see no reason why he won’t be able to generate an equally lucrative restart at CSX.
How did Harrison achieve that “turnaround”? By mimicking the infamous “Chainsaw Al” Dunlap. At his previous CEO stop, Canadian Pacific, Harrison cut his workforce by 34 percent.
Harrison, for his part, signaled he’ll take his basic Canadian Pacific game plan to CSX — and that prospect has the unions that represent 22,000 of CSX’s 27,000-employee workforce much more than slightly apprehensive. Harrison’s previous corporate “success” has come on the backs of cashiered workers.
Business analysts see similarly stunning job losses in store for CSX. “We expect emphasis now to be placed on cost cutting,” notes Ben Hartford, a transportation expert at Robert W. Baird & Co.
But the new CSX CEO doesn’t rate as a pure one-trick pony. Harrison does have other strategies for cutting costs besides killing jobs. He has a particular fondness for running longer trains. During Harrison’s tenure at Canadian Pacific, the number of cars in an average train bounced up by 25 percent.
So the next time you find yourself twiddling your thumbs at a railroad crossing, waiting for an incredibly long CSX freight train to rumble by, keep in mind that your wait does serve a definite purpose. You’re helping to make Hunter Harrison the richest railroad executive since America’s original Robber Baron days.
But also keep in mind that you’re only losing time. Thousands of other Americans are likely losing the best job they ever had.
Sheesh, after reading that you'd almost expect him to have horns and fangs..
Ulrich Sheesh, after reading that you'd almost expect him to have horns and fangs..
I dunno - after reading many of the accounts (many being third party, to boot), I get the feeling many of his former employees feel the same way.
I also get the feeling that those same folks would probably believe there's a mispelling in Balt's quote:
Some context: In Harrison’s last gig, ruining the Canadian Pacific railroad,...
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
I am patiently waiting for merger proposals. Believe that is EHH's next big play and upcoming soon. Something's coming down the pike!
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